Aug. 20, 2013
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A Barnes & Noble bookstore in Orlando. / John Raoux, AP

by By Hadley Malcolm, USA TODAY

by By Hadley Malcolm, USA TODAY

Barnes & Noble shares fell Tuesday after the struggling bookseller announced that retail revenue and sales of its Nook e-reader took sharp dives in the second quarter.

Investors are likely also reacting to news that founder and board chairman Leonard Riggio dropped his bid to buy the company.

Shares fell $2.06, or 12%, to close at $14.61.

The company's profit fell 8.5% to $1.3 billion for the quarter, compared to $1.45 billion for the same period last year. Barnes & Noble's Nook experienced a huge loss, with revenue down more than 20%. Sales of the e-reader are down, as are content sales.

Barnes & Noble said sales faced a tough comparison from last year when the company rode the success of The Hunger Games and Fifty Shades of Grey trilogies. Excluding those titles, digital content sales were down 6.9%, compared to 15.8% including them.

Barnes & Noble retail stores also continue to suffer, with a decrease in revenue of 9.9% to $1 billion. The company said it expects sales at stores open at least a year to keep declining "in the high single digits."

Riggio dropped his bid to buy Barnes & Noble's stores and online operations, a plan he originally proposed in February.

"While I reserve the right to pursue an offer in the future, I believe it is in the company's best interests to focus on the business at hand," Riggio said in a company release, adding that the company's priority right now is to focus on Nook sales.

Overall the company experienced a net loss of $87 million, or $1.56 a share, compared to $39.8 million, 76 cents a share last year.